The three years which have followed the end of the hostilities have been years of search and labour, both intellectual and practical, to build on this land of Asia a strong and flexible democracy, capable of facing and solving problems present in all newly independent countries.

You know, gentlemen, how urgent and revolutionary these problems were for us, and how strong was the internal and external pressure which Viet-Nam has faced, and will have to face for many more years to come.

You therefore deemed it necessary, in drafting the Constitution, to take into consideration not only the permanent values of our traditions and the experiences of our elders in democracy, but also the geopolitical factors which weigh heavily on the destiny of our people.

That tragic reality must however not be accepted as a determinism that would stop the forward advance of our people. By making the Human Being, as the living principle of liberty and creativity, the very foundation of its structures, the Constitution has laid the framework for the life of the Nation and has maintained it continuously open to progress, rejecting all preconceived final judgement.

It is out of the desire to remain faithful to the spirit of the Constitution and to provide our people, within the limits of its means, with the basic conditions indispensable to its development at the same pace as the modern world that the Government has directed its main efforts less at superficial achievements or at prestige raising then at the democratic infrastructure in every field. It is on this moral and material structure that the country can solve, in independence and freedom, its great internal and external problems, especially those of industrialization and unification.

It is undeniable that the present world, psychologically and technically, is heading toward some form or another of community life.

Viet-Nam, which could not remain aloof from this general development, might be engulfed by the collective wave, if it did not have a correct vision of the scale of values.

The Constitution has fixed this scale of values, it has placed the Human Being at its

summit. It has, at the same time, defined his responsibilities towards the community in which he lives and grows.

The doctrine of the Human Person and of the Community, both living in a definite milieu, subject to revolutionary tensions, is the basis of the moral rearmament of the Vietnamese citizen. It permits him to become conscious of his dignity and of his place in the world , and of his duty to free himself from all tyrannies, whatever their origin. It also helps recreate in our country the spiritual cohesion which, many times in history, has saved the Vietnamese race from complete destruction.

This doctrine finds a first application in the effort of the Government to provide each landless family, directly or indirectly, with a house and sufficient land for its subsistence. In the present state of civilization, this basic property is a real guarantee of individual freedom.

To increase the value of this guarantee, the Government encourages bold projects in the villages in order to create, at this level, a zone of elementary economic prosperity.

Completed by an adequate formula of furtherance of the worker’s interest which the Government is examining with the labor organizations and the Representatives of the International Labour Office, this policy of building a basic democratic structure is the subject of the Government’s major concern.

Such is the aim of the Land Reform, of the Agricultural development of the High Plateaux, and of Community Development as well as the Committee for the study of Labor Organization. These operations of moral and material rearmament of the Vietnamese citizen provide him with a democratic basis for retrenching in case of crisis and depression, and at the same time with a starting point for reconstruction at the national level.

It is on this moral and material foundation, modest and realistic and which depends directly on the resources of the country, that the Government seeks to solve, in independence and freedom, the great national problems.

Army.

However, no achievement of whatever kind is possible without internal and external security.

That is why, as soon as the postcolonial period of anarchy was overcome, the Government immediately attacked the task of reorganizing the structures of the Army and of the Police.

The Army, whose mission was to defend the Republic, has become national in its command and its recruitment. Reduced to half its initial size, and reorganized according to a defensive and pacific policy, the Army pursues an intensive training in every field.

From this point of view, military service is an expression of the principle of equality for all citizens in the responsibility of defending the nation and constitutes at the same time a training school to develop a sense of civic responsibility.

Before the recrudescence of Communist subversive and destructive action in all South-East-Asia since last year the Government was obliged to take more effective measures to assure internal security. Here is a balance sheet of the losses which Viet-Nam has suffered since the resolution of the last Congress of the Chinese Communist Party toward the end of 1956: 43 troops, 23 civil guards, 40 militiamen, 8 Social Cadres, 68 village notables, and 228 private persons. If we add to it the number of weapons recovered (735 rifles, 233 light machine guns, 19 submachineguns, 4 machineguns, 52 mortars and 281 revolvers), and if one takes into account the fact that most of the communist raids took place along the Cambodian border, one would have an idea of our difficulties and of our sacrifices in facing this form of cold war.

Thanks to a combined action of security agencies, Civil Guard, village militia, social action and information, we have the situation under control and strengthen our security system each day.

Administration

Together which the reforms of the Army and the Police, we have completed the installation of our Administration.

In order to attain a greater rationalization of our Administrative work, steps were taken to suppress certain useless services, to create new agencies or to distribute specialities in a better fashion.

Among the 170 newly-set-up agencies the Directorate for Social Action of the High Plateaux for the study and solution of the special problems of that area should be pointed out. Special mention should also be made of the Commissariat for Agricultural Development, the Cinematographic Center, the Scientific Police Laboratory, the Directorate of Cooperatives, the Center for Industrial Development, the National Committee for Agriculture and Food, the Service of Agriculture Research, the provincial tribunals, and the offices of legal investigators at Saigon.

A material organization, however perfect, is meaningless without the spirit which directs it. In this respect, the Government will redouble its efforts for the political and moral training of the Cadres at all echelons of the Administration. For that is an essential point in the program of national renovation.

Economy

The political stability which made possible the reorganization of the Army and of the Administration is equally a major condition of economic reconstruction.

As soon as political recovery was achieved, the Government sought to fulfil political independence by economic independence.

In the first stage, the government had endeavored to deal with the most urgent tasks, the restoration of the means of communications and the maintenance of the existing living standard in spite of the necessity of converting a war economy to a peace economy.

It was urgent to rehabilitate the means of communications, of irrigation and other essential public works in the shortest time possible so as to allow the provinces which had lived more or less in isolation to resume their places in the circuit of the national economy.

In the space of three years 10,000 kilometers of road out of 13,000 and 300 kilometers of railways out of 1,200 have been hastily repaired; 10,000,000 cubic meters of earth out of 50,000,000 dredged from the canals; the most important systems of irrigation, such as those of Dong-Cam, of Tiep-Nhut, etc... rehabilitated.

These works would not have permitted the country to return to normal life had it not been for the enthusiasm of the officials which made up for their initial lack of experience and organization and transformed them into an administrative apparatus capable of carrying out the decisions of the Government throughout the national territory.

Thanks to the goodwill of the officials the living standard was maintained and even improved even in the most remote parts of the country. The peasant class, which represents the major part of the population, has benefitted from the advantages of a restored peace. Criticism directed at the officials would be fairer if we placed them against the background of those anxious days when the country was threatened with disintegration and anarchy.

At the end of 1955 and at the beginning of 1956 the economic and monetary situation was none too bright. The rise of prices which had begun during the war did not level off after the return of peace and continued to reduce the purchasing power of the working classes. To this steady rise were added occasional spurts of prices upwards, resulting from the unscrupulous speculations of a small number of merchants who took advantage of shortages of goods due to an irregular supply of imported merchandise.

Vietnamese merchants endeavored to relieve the foreigners and take the place they must occupy in an independent country. This hurried step had untoward consequences: the initial inexperience of our compatriots in the highly specialized import trade incompatible with a steady supply of the market.

Further, bank credit was largely in the hands of foreign banks and the National Bank had no effective means of controlling that source of credit.

The foregoing factors were therefore at the origin of the excessive rise of the price of rice at the end of 1955 and the beginning of 1956, in spite of the existence of a sufficient stock to fill the gap between two harvests and the certainty of a good crop.

The situation could have been aggravated suddenly and the purchasing power of our money might have deteriorated rapidly at the expense of the whole population.

Strong measures were necessary, and these were taken by the Government. The import trade had to be reorganized quickly by reducing the number of importers and by putting pressure on the remaining ones to group into large companies in which more capital would be available, and business experience pooled. Prices were controlled to prevent speculative rises.

At the same time measures were taken to reduce the monetary circulation and control bank credit. The war left us with a fiduciary volume of inflationary character amounting to 8 million piastres; by contrast our foreign exchange reserves were uniquely in French Francs, and nearly negligible.

In addition, production was extremely low and foreign companies were only concerned with transferring all their profits and the maximum of their capital aboard, thus aggravating still more this inflationary pressure.

In spite of such a heavy legacy, the Vietnamese currency successfully weathered the trials imposed upon it in the course of 1956.

Early that year, Viet-Nam broke away from the Franc Zone, successfully set up locally an official foreign exchange market and maintained its stability. Toward the middle of the same year, a free market was set up which lessened the pressure on the piastres awaiting transfer. A policy of foreign exchange saving was also introduced which strengthened the Vietnamese piastres and reduced the importance of the black market.

A number of taxes have been revised or increased for three purposes: to even out consumption, to extend the new burdens more equally to the privileged classes and to increase State revenues.

All these measures have now borne their fruit the rise of prices has been stopped, the money stabilized and credit controlled. We have left behind a war economy and are now entering a peace economy.

True, the stabilization of the situation and the reconversion of the economy have brought about a number of difficulties to various categories of the population and have often hurt legitimate interests. But our merchants must understand that the high profits to which they are used can only exist with the artificial activities arising from the war. Now our country is pursuing a policy of peace. Our industrialists must equally make an effort at reorganization to reduce cost and improve productivity in their enterprise; the time is gone when one had only to produce in order to sell, and only to sell in order to make profits. The peasants may have been dissatisfied at the fall in the price of rice, but I would like to have them understand that high prices have benefitted only the speculating middlemen, and that they themselves share but a little part in the proceeds. The fall in the price of rice is compensated by a fall in the price of the merchandise which they buy with the proceeds of the rice sold. On the contrary, with peace restored with the land reform and the aid from governmental technical services, they can increase their production and improve their living conditions in the end.

A certain slowing down of business may have been a cause of anxiety for all. This stagnation was due to the end of artificial activities. But our efforts in carrying out the program of economic development at an accelerated pace will soon compensate for that stagnation. It is true that the restarting of the economy will carry with it many problems pertaining to reconversion, but we must make the necessary effort at adaptation; it is better to work hard for a stable future than to live in a climate of facile but artificial prosperity which may crumble overnight.

Such is essentially what we have achieved together in the last three years. The results achieved have raised the prestige of free Viet-Nam in the world, and we have now acquired the certainty that we shall be able to progress each day toward a better future in peace, order and stability, for the benefit of the greater number.

However, we must not forget that we have only cleared one particularly difficult stage on the road of national reconstruction; other stages are awaiting us; we must still make efforts to attain our aim. Let us not forget that we still have to perfect our economic independence.

We have so far enjoyed a substantial aid from friendly nations. Without such aid, our budget and our balance of payments would be strongly in deficit. If we are deeply grateful to our friends for their aid, we must now begin to think of living by our own means. The day when our national production regains its pre-war level, taxes will find their way steadily to the national coffers, and we shall no longer need external aid in order to live; the support from our friends will then only be used to equip our country.

We must also strive at renovating the structure of our national economy. It is true that our basic activity will be in the field of agriculture, but we must not be dependent on foreign industries: we must progressively establish national industry in order to provide our population with manufactured goods at reasonable prices. Why should we, for example, continue to import paper, crystal sugar, rubber goods, or glasswares, when we have plenty of wood and bamboo to make paper, sugar canes to make sugar, natural rubber and white sand which are exported annually? No doubt our industries will have to compete with foreign products, but with redoubled efforts, they will win this competition. Indeed they will produce for the local market and will be free from transport cost, insurance and custom duties.

We must constantly remember that the world economy is changing all the time. With the discoveries of the atomic age, the rhythm of this evolution is still faster. To overcome the state of under-development in which we have been confined for many centuries, we must more than ever intensify our efforts. It is only at this price than we can catch up on our backwardness.

Certain people are used to relying entirely on the government: They think naively that it is sufficient to establish a well conceived national economic plan to modify the situation completely. Such miracles cannot take place in the economic field. A national plan could succeed only if all the high spirited forces of the nation were mobilized: these forces should exist previously. Under the regime of freedom in which we are living at present, in principle like in practice, all initiative must come from private individuals. The government could provide guidance, control, support. But how could it replace private enterprise in all fields of activity?

I take this opportunity to draw the attention of the nation to a fundamental point for the economic life of our people: national discipline.

Each national plan is a forecast; but it is also a set of directives. If each one wants to produce, trade, consume as he wishes during the execution of the plan, how could we carry out common programs? Private initiative must therefore be coordinated and oriented within the framework of the national plan. To observe discipline is the fundamental condition of success.

We should not think that this discipline is necessary only in planned economies. Even in countries believing in liberalism, this discipline is indispensable, because in the present state of affairs all economic activity is subject to the exigencies of technique which is imposed upon each of us and prevents him from acting too independently.

Besides, the characteristic of civilized nations is the establishment of a discipline by themselves which they observe freely and loyalty. If the authorities must intervene each moment to watch the conduct of each one and punish the infringements of the rules ... where would freedom be? There is only one way of avoiding that intervention: each one must accept this discipline and see to it that his compatriots do the same.

All the measures of control I have spoken of earlier and which are necessary at a difficult time would lose their raison d’etre if each of us would recognize the primacy of the national interest and if public disapproval were sufficient to ban those who were tempted to infringe the rules of common loyalty.

If to that sense of discipline we add a sense of sacrifice which makes us capable to put aside a part of the wealth produced each year for the purchase of new equipment, and to furnish his share in a program of works of common interest, then I can assure you that although we are at present a backward country ruined by a prolonged war, we can occupy in a short time a good place among the Asian countries in the competition for economic development and for a better living standard.

Cultural and Social Problems

I have dealt at length with economic questions because it is to this point of the program which the Government will devote its efforts this year.

Also the solution of social problems depends upon economic prosperity.

However the increasingly important place occupied by economics in modern life must not make us forget man who is the origin as well as the end of this economy.

The effort at economic recovery is above all an intellectual, cultural effort to find solutions conforming to our national genius, to our own resources, and to the position of our country in the world.

For that reason, it is important to give a strong impulse to national education, and to the cultural revival of the people. Efforts have been made in this field. Numerous primary and secondary schools and classes have been created. A new university has been established in Hue. Authorization has been granted for the creation of a private University in Dalat. The government has decided the building of a new medical school and veterinary college. In the field of technical education, three new Superior Schools have been set up, bringing the number of specialized centers to four.

On the other hand, the setting up of evening primary and high schools for the benefit of workers. In spite of their importance, these achievements are still insufficient both in quality and number.

The Government counts on the Community Development movement at the village and provincial levels to solve the basic questions pertaining to the social domain generally, and to the fields of primary ad secondary education especially. Heartening results have been achieved under the sign of Community development which remains us of the traditional institution of Huong Hoc or Communal Contract.

In six months of Community Development work, group of villages have built 2,730 kilometers of road, 647 small bridges, 93 kilometers of canals, 138 kilometers of dikes, which has increased the economic prosperity of these regions and permitted the construction of 440 Communal Schools, 54 maternity houses, 145 first aid stations and 31 sports fields.

These works represent a value of 92 million piastres which the State did not have to take from its budget. It is in the same spirit of cooperation that 1,300 low-cost houses havebeen built in 10 centers distributed around the capital and that 1,825 others will be completed before the end of this year.

From the preceding, it is clear that intellectual and moral factors play a great part in our national recovery politically, economically and socially.

It is for this reason that the cultural question to which is bound the question of command must be foremost in the thoughts of the Government. Our leaders at all echelons must make greater efforts to raise the cultural level in order to find adequate solutions to our problems and to adopt a style of action more in conformity with the principles of the Constitution. They must also understand better the policy of democratic infrastructure of the government, such as I had the honor of expounding at the beginning of this message.

For on the success of this policy greatly depends the solution of our great problems.

Indeed, whatever the angle from which we wish to consider the problem of unification, all realize that one thing is certain: the influx toward the South of a new and much more important exodus of population then that of 1954 after Geneva. The multiplication of zones of basic economic prosperity at the village level, in the lowlands like in the Highlands, can be an effective factor for the rapid absorption of this human overflow.

Likewise, in the domain of industrialization where the problem of investment is fundamental, the increase of family income thanks to the development of these zones of elementary prosperity can contribute to the increase of internal investments and consequently to reduce our needs for foreign capital.

It is through this human and realistic policy, thanks to which the people enjoys immediately each advance of democracy, that we can consolidate the union of all in the struggle against the communist lies about the earthly paradise.

Foreign Relations

In proving by facts the sincerity with which we pursue the building of independence, liberty and peace, we have gained the sympathy of the Free World, especially that of the peoples of Africa and Asia.

The choice of Saigon as the seat of the Ninth Colombo Plan Conference is not the result of accident.

The sympathy of the countries of the Free World is further expressed in the invitations of several heads of state to me to visit them and discuss with them problems of common interest. Thus I visited the United States, Thailand, Australia and Korea, and soon will visit India and Burma.

Likewise we have developed our relations with the countries of the Middle-East, Africa and Asia such as Lebanon, Iraq, Morocco and Malaya.

Besides the normal diplomatic relations and official participation in all international Conferences, our country has seen its prestige heightened in several non governmental international Congresses, such as the Congress of Asian Writers, the Congress of Asian Socialists, the Pen Club, the Congress of the Free Trade Union’s and the Inter-Parliamentary Union.

From this sympathy, we have derived, besides moral and diplomatic support which are important for our position in the world, financial aid which happily completes our resources devoted to the development of our country. This external aid comes mainly from the United States, France and the Colombo Plan Countries.

I take this solemn opportunity to thank, in the name of the Vietnamese people, these friendly peoples for the sacrifices they have accepted to alleviate our burden. Our gratitude is all the deeper as these people themselves encounter great difficulties at present.

Such are, gentlemen, in broad outlines, the most significant achievements of the past year. Such are the principles which have inspired these achievements and the programs laid down in the budget for the coming year.

The country can be certain that all the measures taken by the Government reflect a constant preoccupation: that of building a real democracy thrugh the organization of a prosperous economy without surrendering independence, by the achievement of the unification of the country without sacrificing the liberty of man.